Related Media:

Oil and gas pipelines across the country are being expanded to handle increased production from shale plays, but those in the eastern part of the country are seeing the most changes — changes driven by growing importance of the Marcellus and Utica shale plays, according to investment firm Moody’s.

Work being done includes building new pipelines from scratch, expanding existing pipelines and even reversals of lines that once took natural gas from the Gulf Coast to Pennsylvania and beyond.

“The Marcellus is at the epicenter of the change in gas flows across North America,” stated Moody’s in a report released last week. The firm’s data shows that, of the advanced projects nationally meant to increase pipeline capacity by 20 percent by 2017–2018, 88 percent are in the East.

Mihoko Manabe, senior vice president at Moody’s and the report’s author, said those pipelines are transporting Marcellus and Utica gas to a variety of regions.

“The industry wants options,” Ms. Manabe said. “They want to be able to send it to Canada and the Northeast — we all saw the impact of the polar vortex — as well as to the Southeast’s growing power generation market, to hubs around Chicago and to LNG export terminals on the Gulf Coast.” LNG refers to liquefied natural gas.

Houston-based Spectra Energy operates Texas Eastern Transmission, an interstate pipeline that is expected to undergo an expansion by the end of this year with a project called the “Texas Eastern Appalachia to Market” (TEAM 2014).

The Texas Eastern pipeline itself spans 9,200 miles from New York, New Jersey and Pennsylvania to the Gulf Coast. The $500 million TEAM 2014 expansion to the line will include work in Pennsylvania, Ohio and West Virginia, and ultimately increase the system’s capacity by 600 million cubic feet per day (MMcf/d).

“Construction will be in full swing this spring and summer,” said Marylee Hanley, director of stakeholder outreach for Spectra. “This project will bring new supplies to markets around the country, including power generation and industrial customers.”

Two drilling companies, Chevron and Pittsburgh-based EQT Corp, will anchor the system with each company shipping a minimum of 300 MMcf/d natural gas through the system, according to Spectra.

For Spectra, the TEAM 2014 project is one of nearly a dozen such pipeline projects that the company has planned through 2017 to ship Marcellus and Utica shale gas out of the region.

Marcellus production of gas has been substantial, surging from 1.2 billion cubic feet a day (Bcf/d) in 2007 to about 14.8 Bcf/d currently. “Expectations are that this could approach 23 to 25 Bcf/d by the end of the decade,” Moody’s said.

The pipelines that have seen the most activity include the interstate pipeline systems of Texas Eastern Transmission, Transcontinental Gas Pipeline Co. and Tennessee Gas Pipeline Co., according to Moody’s. Those systems have seen “numerous local de-bottlenecking projects to get gas mostly to nearby East Coast points,” the report said.

“Consequently, these eastern pipelines enjoy the best organic growth opportunities in North America, as they develop the next round of projects that will take Marcellus gas to new markets further afield to the North, West and South — a reversal of how gas has traditionally flowed east of the Mississippi,” Moody’s said.

“Unlike the billion-plus-dollar greenfield projects in the early years of the shale phenomenon, most current projects typically cost in the tens to hundreds of millions of dollars,” the report said.

“These retooling projects involve adding compression and looping to existing lines and should entail limited execution risk and time to undertake.”

Catherine Landry, spokeswoman for the Washington, D.C.-based trade group Interstate Natural Gas Association of America, said the Marcellus region is getting a lot of attention and could change the flow of resources around the country.

"Largely, for the interstate part, they are looking at reversing flows or expanding capacity to allow that Marcellus gas to flow to nearby markets,“ Ms. Landry said.

The natural gas association estimates that by 2035, the U.S. will need about 43 billion cubic feet per day of new gas transmission capability — about 850 miles per year in new gas transmission mainline and almost 14,000 miles per year in new gas gathering lines that link up to larger interstate lines.

Investments in infrastructure could resolve an issue for the Marcellus region.

Although the U.S. Energy Information Administration reported the Marcellus Shale pushed Pennsylvania into the top three natural gas producing states in 2012, following Texas and Louisiana, a significant portion of that production is from backlogged wells — meaning they have been temporarily shut in until pipeline capacity is available.

“A current backlog of natural gas wells, or wells that have been drilled, but not yet completed so they can produce natural gas, will be a major contributing factor to future growth in production, particularly in the Marcellus Shale,” the EIA said.

A Barclays report on Feb. 28 estimated more than 1,300 wells in Pennsylvania remain backlogged.

Join the conversation:

To report inappropriate comments, abuse and/or repeat offenders, please send an email to
socialmedia@post-gazette.com and include a link to the article and a copy of the comment. Your report will be reviewed in a timely manner.
Thank you.